Item 4. Controls and Procedures
Item 4.
Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the SEC’s rules and forms and that this information is accumulated and communicated
to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding
required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management
is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Our management, with the participation of our
Chief Executive Officer and our Interim Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures
as of September 30, 2024. Based on such evaluation our Chief Executive Officer and Interim Chief Financial Officer have concluded that
our disclosure controls and procedures were effective as of September 30, 2024. Refer to the additional discussion below regarding the
remediation of the previously disclosed material weakness.
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Material Weakness in Internal Control Over
Financial Reporting
As reported in our management’s report on internal control over financial
reporting within our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, we identified a material weakness in internal
control related to the design and implementation of information technology general controls related to the Company’s information
systems that are relevant to the preparation of consolidated financial statements. Specifically, management did not design and maintain
user access controls to ensure appropriate segregation of duties and to adequately restrict user access to financial applications and
data.
During the fiscal year ended June 30, 2024, management implemented its
previously disclosed remediation plan to enhance the design of information technology general controls (“ITGCs”) related to
user access and proper segregation of duties. This plan included:
·
Modifying user rights to significantly restrict access to certain key financial applications and functionality.
·
Implementing additional review and approval requirements within the financial systems workflow.
·
Creating new audit reports that require management review and approval of changes made to key attributes within the financial application.
·
Improving and maintaining documentation underlying ITGCs to promote knowledge transfer upon personnel and function changes.
·
Implementing an IT management review and testing plan to monitor user access, specifically focusing on financial applications.
As of June 30, 2024, management had implemented
the remedial actions and controls described above concerning the material weakness. Due to the timing of the design and implementation
of our remediation efforts during the fourth quarter of fiscal 2024, there was insufficient time to demonstrate consistent execution of
certain controls and conclude on the operating effectiveness of internal control over financial reporting as of June 30, 2024. Subsequently,
through September 30, 2024, management has determined that appropriate time has elapsed to demonstrate the operating effectiveness of
the remediated controls through testing of a sufficient number of instances.
Changes in Internal Control over Financial Reporting
Other than the ongoing changes to our controls associated with remediating
the material weakness described above, there were no changes in our internal control over financial reporting identified in connection
with the evaluation required by Rule 13a-15(f) and 15d-15(f) of the Exchange Act that occurred during the quarter ended September 30,
2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
29
PART II. OTHER INFORMATION
Item 1.
Legal Proceedings
Refer to Note 8 of Notes to Unaudited Condensed Consolidated Financial
Statements, included in Part I, Item 1 of this Quarterly Report on Form 10-Q for the three months ended September 30, 2024 (this “ Report”),
which is incorporated herein by reference, for a discussion of legal proceedings.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.